Last week, a buy order for 50,000 contracts of ether options – with a $400 strike price and expiring in June – appeared on Deribit’s order book, raising alarm bells in the crypto community. As of press time, ether was priced around $1,300, so the options trade would pay off if the ether price slid 69% in less than six months. On Deribit, one ether options contract represents one ETH.

• «On ether, the trade that made the most talk was the purchase of puts $400 on June 2023 made on-screen with a resting bid of [50,000] contracts,» digital assets data provider Amberdata said in its weekly newsletter published Sunday.
• A put option gives the purchaser the right but not the obligation to sell the underlying asset at a predetermined price on or before a specific date. A put buyer is implicitly bearish on the market. A resting bid is an order whose price is away from the market and is yet to be executed.
• As of early Monday, the order was partially filled for 40,000 contracts. The purchaser paid a premium of 0.0095 ETH per contract, amounting to a total outlay of 380 ETH or $494,000, according to data from Deribit.
• Call and put option buyers pay a premium to sellers as compensation for offering protection against the bullish or bearish move. The premium is the maximum a buyer can lose if the market goes against their position. The profit potential is unlimited because, in theory, the market could see extreme bull runs or drop to zero.
• The order might be an outright bearish bet aimed at profiting from a potential price crash. But it might also be a hedge taken against a bullish spot or futures market exposure in ether or other alternative cryptocurrencies. Most cryptocurrencies move in tandem with market leaders, bitcoin and ether.

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